Monday April 1, 6:00 am Eastern Time
Press Release
SOURCE: Swift Energy Company
Swift Energy Reports 17.5% Increase in First Quarter Production
$7.5 Million Cash Sale of Russian Interests
and Update of Operational and Hedging Activity
HOUSTON--(BUSINESS WIRE)--April 1, 2002--Swift Energy Company (NYSE:SFY - news; PCX:SFY) announced today that its first quarter 2002 production increased over 17.5% to at least 12.1 billion cubic feet equivalent (``Bcfe'') compared to 10.3 Bcfe in the first quarter of 2001. This is also a 5% increase from the 11.5 Bcfe reported in the fourth quarter of 2001. Approximately 20% of the first quarter production comes from the Company's new TAWN core area in New Zealand.
Terry Swift, President and CEO of Swift Energy Company, noted, ``We have made significant progress adding low decline production to our producing asset mix through the re-allocation of capital over the past six months. We are extremely pleased to post significant corporate production growth in excess of our guidance for the start of 2002, a year in which we believe our production will grow 10% to 20%. This initial growth in production is primarily the result of our recent TAWN acquisition in New Zealand, but our domestic properties have also performed better than originally forecast. Our Rimu discovery should begin production later this month, providing additional production from this area over the course of 2002. This new production, along with our efforts in Lake Washington and our other domestic core areas, will support this growth in 2002.''
Sale of Russian Interests
The Company also reported that it had received $7.5 million for its interest in the Samburg project located in Western Siberia, Russia as a result of the sale by a third party of its ownership in a Russian joint stock company, which owned and operated this field. This cash payment will result in the recognition of a $7.5 million non-recurring, pre-tax gain in the first quarter of 2002.
Domestic Activity Update
The Company recently drilled and completed two development wells in the Lake Washington Area, the BLD Cockrell Moran #15 well and the State Lease 212 #99 well. The Company has a 100% working interest in both wells. The BLD Cockrell Moran #15 well was drilled to a depth of 7,200 feet and tested at a rate of 240 barrels of oil and 120 thousand cubic feet per day. The State Lease 212 #99 well was drilled to a depth of 6,651 feet and tested 127 barrels of oil and 213 thousand cubic feet per day. The Company's program has nearly doubled production since the acquisition of the field in March 2001. The production in this field net to the Company's interests increased from an average of 652 barrels of oil equivalent (``BOE'') per day for March 2001 to an average of 1,236 BOE per day for February 2002. The Company will be moving a barge rig into the field this month to begin a nine-well drilling program.
Terry Swift also noted, ``Our work to date in Lake Washington is validating the potential that we foresee there, and we expect to be able to double production again by year-end with our drilling program. Based on recent drilling results and comprehensive geologic work, the six shallowest sand intervals have significant probable reserves, which we believe have the potential to be in excess of 40 million barrels. Since January, ongoing reservoir studies have identified approximately three million barrels of reserves that we expect to add to our proved category this year. Additionally, we have already begun to improve our margins through extensive cost reductions. A specific plan is underway to target further cost reductions in all our core areas. We are pleased with our efforts to date and anticipate additional positive results from our plan.''
New Zealand Activity Update
The production from the TAWN fields has averaged approximately 40 million cubic feet equivalent per day since the fields' acquisition on January 25, 2002. The four fields making up TAWN have averaged over 1,050 barrels of oil, 30 million cubic feet of natural gas and 550 barrels of condensate per day over this period. Production has been higher than expected during the period because of increased requirements for energy in New Zealand to offset a decline in hydroelectric generated power, which may or may not continue. The fields are expected to be shut-in for approximately one week in early April for routine upkeep at the Waihapa Production Station.
Commissioning of the Rimu Production Station is continuing with production from the Rimu wells expected to begin this month. The Company will also be participating in the Huinga-1B well with a 15% working interest on petroleum exploration permit 38716. This well is expected to begin drilling later this month.
Hedging Activity Update
The Company also reported that it had entered into hedges covering a portion of its oil and natural gas production from May 2002 through December 2002. These hedges are in the form of participating collars, or a series of puts and calls (``costless collars'') with participation above the cap. The oil collars have a floor of $20.00 per barrel and a cap of $27.72 per barrel and cover 25,000 barrels of oil per month. The natural gas collars have a floor price of $2.50 per million British Thermal Units (``MMBtu'') and a cap of $4.17 per MMBtu and cover 200,000 MMBtu per month. The Company will participate in 60% of the price above the cap for both the oil and natural gas collars. The Company's natural gas production in New Zealand is contracted for at defined prices under two long-term, reserve-based contracts.
Earning Conference Call
The Company will report 2002 first quarter results on Wednesday, May 1, 2002 and conduct a conference call, with live web cast, on that date at 9:00 a.m. CDT. To participate in this conference call, dial 973/872-3462 five to ten minutes before the scheduled start time and indicate your intention to participate in the Swift Energy conference call. This call will be available for digital replay until May 14, 2002 by dialing 973/341-3080 and using pin #3197036. Additionally, the conference call will be available over the Internet by accessing the Company's website at www.swiftenergy.com and clicking on the event hyperlink. This web cast will be available online at this site through May 14, 2002.
Swift Energy Company engages in developing, exploring, acquiring, and operating oil and gas properties, with a focus on onshore oil and natural gas reserves in Texas and Louisiana and onshore oil and natural gas reserves in New Zealand. Founded in 1979 with headquarters in Houston, Texas, the Company has grown its proved oil and gas reserves, production, and cash flow over the last five years through a disciplined program of acquisitions and drilling, while maintaining a strong financial position.
This material includes ``forward-looking statements'' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The opinions, forecasts, projections or other statements other than statements of historical fact, are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Certain risks and uncertainties inherent in the Company's business are set forth in the filings of the Company with the Securities and Exchange Commission. |
